(4) Real Estate Investments –

The Partnership leases its properties to tenants under net leases, classified as operating leases. Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property. For some leases, the Partnership is responsible for repairs to the structural components of the building, the roof, and the parking lot. At the time the properties were acquired, the remaining primary lease terms varied from 10 to 18 years. The leases for the KinderCare daycare center and Red Robin restaurant were extended to expire on June 30, 2022 and December 31, 2027, respectively. The leases provide the tenants with two to six five-year renewal options subject to the same terms and conditions as the primary term.

The Partnership's properties are commercial, single-tenant buildings. The Red Robin restaurant was constructed in 1984 and acquired in 1994. The KinderCare daycare center was constructed in 1999 and acquired in 2002. The Jared Jewelry store was constructed in 2001 and acquired in 2004. The Staples store was constructed in 2008 and acquired in 2009. The Family Dollar store was constructed and acquired in 2012. The Fresenius Medical Center was constructed in 2012 and acquired in 2014. The Dollar Tree store was constructed in 2015 and acquired in 2016. There have been no costs capitalized as improvements subsequent to the acquisitions, except for $43,350 of tenant improvements related to the KinderCare daycare center.

The cost of the properties not held for sale and related accumulated depreciation at December 31, 2017 are as follows:


Property	Land		Buildings		Total		Accumulated Depreciation

Red Robin, Colorado Springs, CO	$	905,980	$	1,323,210	$	2,229,190	$	1,053,057
Jared Jewelry, Hanover, MD		861,052		1,128,053		1,989,105		521,724
Staples, Vernon Hills, IL		882,000		2,832,638		3,714,638		814,379
Family Dollar, Mobile, AL		300,000		635,489		935,489		115,626
Fresenius Medical Center, Green, OH		400,000		1,717,051		2,117,051		176,477
Dollar Tree, Indianapolis, IN		410,000		1,087,714		1,497,714		71,002
	$	3,759,032	$	8,724,155	$	12,483,187	$	2,752,265

For the years ended December 31, 2017 and 2016, the Partnership recognized depreciation expense of $300,119 and $326,554, respectively.

On January 8, 2016, the Partnership purchased a Dollar Tree store in Indianapolis, Indiana for $1,739,074. The Partnership allocated $241,360 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The Partnership incurred $47,902 of acquisition expenses related to the purchase that were expensed. The property is leased to Dollar Tree Stores, Inc. under a lease agreement with a remaining primary term of 9.7 years (as of the date of purchase) and annual rent of $117,387.

The following schedule presents the cost and related accumulated amortization of acquired lease intangibles not held for sale at December 31:


		2017				2016
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
In-Place Lease Intangibles (weighted average life of 79 and 91 months, respectively)	$	675,154	$	223,787	$	675,154	$	155,679

Above-Market Lease Intangibles (weighted average life of 54 and 66 months, respectively)		284,566		155,437		284,566		126,741
Acquired Intangible Lease Assets	$	959,720	$	379,224	$	959,720	$	282,420

For the years ended December 31, 2017 and 2016, the value of in-place lease intangibles amortized to expense was $68,108 and $66,028, and the decrease to rental income for above-market leases was $28,696 and $28,696, respectively. For lease intangibles not held for sale as of December 31, 2017, the estimated amortization expense is $68,108 and the estimated decrease to rental income for above-market leases is $28,696 for each of the next four succeeding years. For the year ended December 31, 2022, the estimated amortization expense is $58,491 and the estimated decrease to rental income is $14,345.

In March 2017, the Partnership entered into an agreement with the tenant of the KinderCare daycare center in Mayfield Heights, Ohio to extend the lease term five years to expire on June 30, 2022. The annual rent will remain the same throughout the remainder of the extended lease term. As part of the agreement, the Partnership paid a tenant improvement allowance of $43,350 that was capitalized. In addition, beginning on July 1, 2017, the tenant received free rent for three months that equaled $40,421. In the first quarter of 2017, the Partnership decided to sell the property. At December 31, 2017, the property was classified as Real Estate Held for Sale with a carrying value of $899,271.

In March 2018, the Partnership entered into an agreement to sell the Red Robin restaurant in Colorado Springs, Colorado to an unrelated third party. The sale is subject to contingencies and may not be completed. If the sale is completed, the Partnership expects to receive net proceeds of approximately $5,380,000, which will result in a net gain of approximately $4,207,500.

The Partnership owned a 40.1354% interest in a HomeTown Buffet restaurant in Albuquerque, New Mexico. The remaining interests in this property were owned by unrelated third parties, who owned the property with the Partnership as tenants-in-common. On November 10, 2015, the Partnership sold the property to an unrelated third party. In December 2014, the Partnership and three of the other co-owners of the property (the “Plaintiffs”) commenced legal action against a fourth coowner (“Defendant”) for breach of contract related to a prior attempt to sell the property. The Plaintiffs are suing to recover damages and attorney’s fees. In July 2015, the judge ruled that the Defendant had breached the contract. On March 24, 2016, the judge heard the Plaintiffs’ motion for summary judgment as to damages. The judge ruled that the Plaintiffs are entitled to attorney’s fees, but declined to award damages until additional proof of damages could be provided. On March 22, 2017, the Plaintiffs signed a settlement agreement with the Defendant for damages related to the breach of contract. The Partnership’s share of the settlement is $35,704. This amount was recognized as Miscellaneous Income in the first quarter of 2017.

In addition, on April 30, 2017, the Plaintiffs filed a motion with the court that details the Plaintiffs’ legal and other costs related to the legal action and why the Plaintiffs believe the costs should be recovered from the Defendant. On July 7, 2017, the judge issued a ruling that set the amount that the Plaintiffs can recover from the Defendant. The Partnership’s share of this amount is $50,689. The Defendant subsequently filed a motion requesting that the judge reconsider the amount awarded. The Plaintiffs filed a response to the Defendant’s motion. On September 6, 2017, the judge denied the Defendant’s motion to reconsider. Subsequently, the Defendant filed an appeal with the Court of Appeals. The Plaintiffs are waiting to find out if the Court will hear the appeal. Due to the uncertainty of this situation, the Partnership did not accrue a receivable for the recovery of any legal costs. Through December 31, 2017, the Partnership’s share of the legal and other costs incurred related to the legal action was $138,426. For the years ended December 31, 2017 and 2016, the legal and other costs were $28,971 and $20,160, respectively.

For properties owned as of December 31, 2017, the minimum future rent payments required by the leases are as follows:

2018	$	1,389,335
2019		1,134,511
2020		1,136,705
2021		1,145,424
2022		815,083
Thereafter		2,601,975
	$	8,223,033

There were no contingent rents recognized in 2017 and 2016.